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Part One

Design for Licensing

Two decades ago, the idea of custom–tayloring a product or technology design specifically around its patentability was still in its infancy, at best highly unusual, and only practiced by very few companies. Over the past twenty years, however, this very strategy has gained increasing importance, leading to the fact that in the present business market, the lack of integration of licensing strategies into the product design cycle has become myopic at best and suicidal in the more common scenario. Of particular relevance is the fact that larger company have very successfully adopted the business model of incorporating intellectual property as corporate assets and generators of revenue, thereby setting a trend for the entire industry. This type of design methodology can encompass three different strategies that we will explain in greater detail in the following.

Approach Strategies

The first approach is the direct approach. This approach is the most costly but it is the safest. The second approach is the cooperative approach. This approach is the least costly and has the greater return and future benefit. The third approach is the submarine approach. This approach is the riskiest and borders on some ethical / moral issues that we will talk about at the end of this article

Any product designed for the marketplace needs to comply with some intrinsic considerations that a designer needs to keep in mind. Profitability is usually the first thing that comes to mind. The second is usually the longevity of the product. Profitability per se is nice, but long-term profitability is even better. An additional factor to consider is time frame. That is, overall profitability as mentioned before is nice but immediate returns are even better, especially in companies pressed for cash flow and / or with VentureCapitalists breathing down their neck.

The old-fashioned business model as outlined above no longer suffices in today's economy because it opens up companies to all kinds of prosecution and litigation.

When designing products in the early eighties, the process was usually separated into two parts. The engineering department was tasked with the technical aspects of the product. The marketing and sales department decided on the marketability and revenue potential of a product. Together these departments would decide on the viability of a product or technology in the marketplace. Today, the paradigm for the design of a product or technology has completely shifted. The new paradigm involves the meshing of design, marketing, and intellectual property to get a complete design for licensing.

Old design methodologies included buzz words like “Just In Time” and “Design for Manufacturability” and “Six Sigma”. These methodologies were used to constrain how a product could be designed and manufactured. In today’s marketplace the constraints are less concrete, and also harder to qualify. When a product is designed today it must go through a gauntlet of applicability studies to decide if it is a good product or not. These studies are no longer leaning toward the look and feel of a product, they now lean toward the manner in which it can further the revenue stream of the company using the Intellectual Property. In order to maximize the profitability, is it mandatory to recognize and incorporate several factors from the very beginning of the product life cycle as key elements deciding over success or failure of the product or technology in today’s marketplace.

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